IIA Updated IIA-CIA-Part1 Exam Questions and Answers by nikolas

Policies that provide examples of inappropriate business relationships best promote objectivity in the internal audit activity’s work by explicitly defining what constitutes a conflict of interest and guiding auditors on how to avoid situations that might impair their objectivity. This clear delineation helps maintain the independence and unbiased perspective necessary for effective auditing.References: Institute of Internal Auditors (IIA) - Code of Ethics and Professional Standards; literature on maintaining objectivity in internal auditing.

The authority of the internal audit activity is best demonstrated through its ability to determine the scope of internal audit services. This authority, granted by the board and senior management, ensures that internal auditors have the freedom to assess and address risks appropriately across the organization without undue influence, reflecting a key element of internal audit's role in organizational governance.References: IIA Standard 1110 - Organizational Independence, which emphasizes the authority of the internal audit activity to define its own scope as a critical aspect of its independence and authority.

According to IIA standards, if nonconformance with the Standards affects the internal audit activity's ability to fulfill its professional responsibilities or meet stakeholder expectations, the internal audit activity should disclose the nonconformance and its impact. This is essential for maintaining transparency and accountability, ensuring that all stakeholders are informed of the internal audit's effectiveness and areas needing improvement.References: IIA Standard 1322 - Disclosure of Nonconformance, which outlines requirements for disclosing the results of quality assurance and improvements, particularly concerning nonconformance.

Prior to the commencement of an IT audit, the ability to assess the potential for fraud risk and identifying common types of fraud associated with the engagement is a required competency for internal auditors. Understanding the specific fraud risks inherent in IT systems and processes is essential for effectively auditing these areas, particularly in detecting and preventing fraud.References: IIA's Competency Framework for Internal Auditors